Last Call: Novartis Gets Vaccine Bricks & Mortar Money

Novartis isn't taking any chances about missing the last call from the government's cash spigot for vaccine manufacturers.

The Swiss company collected the most recent installment of its $865 million in support from the US government before a potential change in attitude towards corporate subsidies by the Obama Administration.

Novartis collected the most recent, and biggest, chunk of that support ($486 million) on January 15, five days before the Obama Inauguration.

Significantly, the new piece includes bricks and mortar, just the kind of direct support to one company – especially a non-US one -- that is most threatened by the change of administration in Washington. Many observers expect the Obama Administration to channel more funds in health to paying for beneficiaries to receive health products and services rather than to support the companies that provide those products and services.

[Editor's note: The publishers of IN VIVO Blog, “The Pink Sheet" and The RPM Report will host a webinar Jan. 29 on the outlook for vaccine developers under the Obama Administration. Dack Dalrymple, Chris Colwell (McKenna Long & Aldridge) and Isabelle Claxton (GlaxoSmithKline) will analyze the prospects for the vaccine business in the next four years. For more information, visit: http://www.windhover.com/ezine/html/ac0109-2lp.htm.]

The January 15 Novartis grant is an eight-year commitment to help Novartis finish building and qualifying its Holly Springs, N.C. facility for the production of cell-culture flu vaccine (seasonal and pandemic/prepandemic). The new money is for “design, construction, validation and licensing.”

The company got $220 million from the Department of Health & Human Services in 2006 (before selecting Holly Springs as the manufacturing site) to begin developing a cell-based vaccine. Novartis says that the first round of funding “was not for the facility, land or building.” The $865 million also includes funding for development work on adjuvants and a chunk awarded to Chiron to help get its flu vaccine production back up to par just prior to the major Novartis purchase of Chiron to get into vaccines in a big way.

By collecting commitments for $865 million from the U.S. government over the last three-plus years, Novartis has successfully defrayed much of the cost of expanding into the vaccine business. The company paid $5.7 billion to buy the part of Chiron that it did not already own in early 2006. The grants do not obviously relate directly to the cost of the initial purchase; but as a marker of the size of support for the Swiss company’s engagement in the vaccine business, the US funding represents more than 15% of that initial investment.

Novartis indicates that commercial production from Holly Springs is more than three years away. “Construction activities will continue until late 2010,” the firm says. After than, “engineering and process validation will start,” continuing through 2011-2012. FDA clearance procedures will follow the process validation.

Holly Springs will eventually produce bulk prepandemic vaccine (vaccines designed against projected pandemic strains), the MF59 adjuvant to permit lower doses of antigen in the flu vaccines and other cell-based vaccine products. By the January 15 contract, Novartis is committed to provide two commercial-scale lots of prepandemic vaccine annually to HHS for at least three years.

The new funds will help pay for the regulatory clearance, which can be a significant cost. The Congressional Budget Office has recently estimated that the FDA approval process can add approximately 25% to the initial construction cost for a new vaccine plant.

CBO, in fact, analyzed the projected government and private spending to develop cell-based vaccine manufacturing in mid-September of last year. At that point, CBO reported that HHS was intending to spend up to $600 million to support the creation of new facilities for cell-based manufacturing – as opposed to the traditional egg-based production system. The Novartis contract does not leave much left (about $115 million ) from those estimated funds.

CBO noted that Novartis says that the total cost for Holly Springs will exceed $600 million. As we reported soon after the Chiron purchase, Novartis has said from the start that Holly Springs would cost between $600 million and $700 million. CBO says other vaccine industry sources have estimated that it should cost Novartis less (about $400 million). Novartis is indicating that the final cost could be well over $1 billion.

The other big participants in the flu vaccine expansion: primarily Sanofi-Pasteur, GlaxoSmithKline and Medimmune (AstraZeneca) have also been beneficiaries of HHS largesse. Sanofi and Medimmune have received respectively $77 million and $55 million to retrofit existing flu vaccine plants.

Novartis, however, claims that it will eventually contribute a larger share (60%) to the total cost of Holly Springs than other manufacturers have put into government-supported retrofit projects. Sanofi and Medimmune each put about 25% into the projects funded by the government. CBO said that companies should be expected to put more in for the development of new cell-based manufacturing facilities.

GSK is developing a site in Marietta, Pennsylvania purchased from Wyeth for increased flu and pandemic production in the US. GSK is nearing the stage to seek FDA approval for filling and packaging of vaccines for use in the US from antigens made overseas. GSK has been reluctant to accept much direct funding for construction for the vaccine production projects: people close to the GSK effort say that the restrictions inherent in government contracts reduce the value of the subsidy funds.

The Bush Administration has really created a new vaccine industry in short order by pumping in money, making use of the public concern for a potential pandemic. Now, the new producers are likely to lobby the new administration to make sure that the products from the new production capacity find an adequate market.

Heroes and False Prophets of Vaccine Safety

Congressman Henry Waxman “is a hero on this debate.”

That sentiment has frequently been expressed by liberal-leaning organizations on a wide range of issues during Waxman’s long 34-year career in Congress.

The current praise comes, however, from a more unlikely source: the top pharmaceutical policy expert at the American Enterprise Institute. The issue: upholding the public’s confidence in childhood vaccinations in light of a purported (and still unproven) link to autism.

The California Democrat got that ringing endorsement on Oct. 10 from Jack Calfee, who typically addresses health care issues from a position almost diametrically opposed to Waxman. From the AEI perspective, Waxman is often the epitome of too much government regulation and too much the friend of liability lawyers.

But on vaccine safety, the representatives of two ideologies find themselves aligned. The confluence of views on vaccine safety between AEI and Waxman should bode well for a continued climate of support for vaccines from the federal government, but challenges still persist.

The chief challenge is the continuing political appeal of the groups seeking to link autism to vaccinations.

Calfee’s praise for Waxman came during a question and answer session at an October 10 AEI session on a new book on the science and politics of autism by Paul Offit, the chief of the vaccine education division at Children’s Hospital of Philadelphia.

Offit’s book, “Autism’s False Prophets,” recounts how the proponents of a link between childhood vaccines and autism have pressed the issue into common parlance. The book traces the origins and issues raised from the decade-old effort to describe a link.

Offit, who bravely accepts the challenge to counter the attempt to tie autism to vaccines, notes that there has been a long history stretching back over 200 years of people looking at vaccines as the source of diseases arising from unknown causes. “Vaccines have been blamed for many diseases for which there are no clear causes,” he told AEI, citing multiple sclerosis, epilepsy, diabetes and mental retardation.

“Autism, like those disorders, has no clear cause or cure.” In that context, Offit observes, “it was just a matter of time” until a link to autism was suggested.

During the AEI event, Stephen Cha, an aide to Waxman, noted that the congressman has also taken a public stand to keep attention focused on the weight of scientific studies refuting the link between autism and vaccines.

Waxman recently sent a summary of the major studies to other members of Congress recently to counter arguments at a briefing on autism sponsored by Rep. Carolyn Maloney (D-NY).

Maloney, a liberal Democrat from Manhattan, is the sponsor of a bill (HR 2832) to require the National Institutes of Health to conduct a comparative study of vaccinated and non-vaccinated populations as a way to examine the allegations of a link between thimerosol and autism.

According to blog reports, the Maloney hearing drew representatives from 59 House offices and 30 Senate offices, including Barack Obama’s office.

The high attendance at the Maloney event demonstrates the persistent political attention to the issue. It even raised its head during the presidential campaign earlier in the spring, pushing Obama, John McCain, and even traditional supporters of vaccines like Hillary Clinton to speak out for caution.

Offit suggests that some of the skepticism about vaccine safety arises ironically from well-intentioned but maladroit efforts to reassure the public.

Offit’s account of the problems generated for vaccines by responding to safety questions too rapidly holds a lesson and warning for other segments of the drug industry and for drug regulators as they head further into the age of post-marketing surveillance reports from a wide variety of sources.

“The precipitous and frightening removal” of thimerosol from vaccines for young children rapidly within three years of the first charges of danger from the preservative actually fed concerns about vaccine safety, Offit told AEI. The effort to get the ingredient out rapidly was led by the American Academy of Pediatrics and “to a lesser extent” by the Centers for Disease Control & Prevention.

By handling the removal “in the manner that it was done,” it scared parents, Offit maintains. Because of the rush parents reasonably “would ask why would one take this ethyl-mercury containing preservative out of vaccines in such a precipitous manner if it wasn’t harmful.”

Offit notes that the “American Academy of Pediatrics put themselves in a position to try to communicate something that was virtually impossible to communicate: ‘yes we are taking it out, but there is not a problem.’”

The academy was put in the awkward position of trying to explain why it had urged action if it felt that vaccines were safe. “If you look at the way that they describe” the push to get thimerosol removed, Offit said, “they say that there is no evidence that thimerosol-containing vaccines are harmful, but to make safe vaccines even safer we’re going to take it out.”

“If it had not been shown to be harmful, how does taking it out make it any safer?,” Offit asks. “It doesn’t; it only makes it perceived to be safer.”

If there is a lesson from the autism debate, the right responses to safety concerns for vaccines (and drugs) in the future are going to take fortitude, careful judgment—and more heroes.

Tough Talk on Vaccines: Clinton, Obama Make Three

She may have eked out a victory in the Pennsylvania Democratic primary, but Hillary Clinton probably won't be getting any more votes from vaccine manufacturers. And as far as the vaccine industry is concerned, neither will Barack Obama.

Both Democratic candidates for president have joined the presumptive Republican nominee, John McCain, in making statements about a purported link between thimerosal in vaccines and autism in children.

And here we thought McCain was the only misinformed candidate, making it safe for the pharmaceutical industry to think about voting Democratic this year. For a reminder on McCain's comments on vaccines and autism, you can check out our early blog post here.

Here's Clinton's response to recent candidate questionnaire from the group A-CHAMP:

"I am committed to make investments to find the causes of autism, including possible environmental causes like vaccines....I will ensure that the NIH has the staff and funding to fully explore all possible causes of autism....

I plan to fully invest in our research agencies so they can protect our children’s health, and so they can find the causes and cures for conditions such as autism....We don’t know what, if any, kind of link there is between vaccines and autism--but we should find out."

Here's what Obama said in response to a question during a rally in Pennsylvania on April 21, according to the Washingtonpost.com:

"We've seen just a skyrocketing autism rate. Some people are suspicious that it's connected to the vaccines. This person included. The science right now is inconclusive, but we have to research it."

We should point out that according to the Washingtonpost.com, there's some dispute over what Obama meant when he said "this person." The Obama campaign asserts that the candidate was pointing to an individual in the audience, and was not referring to himself. Video from the remarks appears to back that up, but Obama still refers to the "inconclusive" science, which has been repeatedly discounted by scientific studies.

We know microtargeting has been especially popular during this election cycle, but is there a vaccines-cause-autism voting faction that we've missed? Or will candidates say just about anything on Primary Day to get elected? Given all the evidence to the contrary on the absence of a link between vaccines and autism, we hope that's all it is.

Beijing Boost for Japanese Encephalitis Vaccine

China has been preparing feverishly for the Beijing Olympics for years to showcase its new world position and economic power.


China's cool new National Swim Center

At the same time, there’s an interesting product development race in the vaccine field that relates directly to the safety of increased travel to Asia from the West. After a long ten-year effort, the race to develop a new Japanese encephalitis virus vaccine is into its final stretch.

Vienna, Austria-based Intercell AG has a BLA (biologics) application pending at FDA for a new inactivated JEV vaccine. Intercell filed its application with FDA at the end of December,
within weeks after filing for a similar marketing authorization application in Europe.

The vaccine, developed over a decade in conjunction with the Walter Reed Army Institute of Research, will be marketed and distributed for Intercell in the US by Novartis. Intercell will manufacture the tissue culture based product in Scotland. The vaccine (IC51) is the Intercell’s leading product candidate.

A preliminary discussion of the vaccine will take place at the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) meeting on Feb. 27-28.

The chairman of the ACIP committee, Dale Morse, MD, Director of the Office of Science and Public Health at the New York State Department of Health, said that the discussion of the JEV vaccine will be one of the interesting topics for the upcoming meeting. Morse told the Feb. 6 meeting of the National Vaccine Advisory Committee that “the current vaccine is in limited supply” and “there may be increased demand around the Olympics for that vaccine.” The US Army has noted the shortage of the current vaccine from Biken due to a halt in production.

Intercell acknowledges that it would take an unusually rapid review of the product by the FDA to have it available for the Olympics in late summer. A spokesperson for Intercell, Lucia Malfent, says: “We do expect licensure for our product in 2008 but most likely the full process of market authorization will not be completed before the Olympics. Therefore, the vaccine will not be available in time for travelers to the summer Olympics in Beijing.” JE vaccinations are not routinely recommended for travelers to Chinese urban areas; the mosquito borne disease is more prevlaent in rural areas.

Intercell IC51 is not on the agenda for FDA’s next Vaccines and Related Biological Products Advisory Committee Meeting (Feb. 20-21). There is one tentative date for VRBPAC in late may before the summer Olympics. The product review for the February VRBPAC meeting is GlaxoSmithKline’s Rotarix (rotavirus vaccine).

Acambis is also working on a JE vaccine, ChimeriVax-JE. The company reported results from Phase III safety and efficacy trials in the first quarter of 2007. Acambis has not reported filing an application for marketing yet.

Cervarix: Big Step for FDA; Can GSK Make the Decision Easier?

Citi's Kevin Wilson is out with a comment on Glaxo's pending Cervarix application at FDA that seems right on point to us.

Extrapolating from some forthright comments by a senior official from FDA's vaccine review division on January 30, Wilson surmises that FDA is feeling the pressure of a big decision on the new generation of vaccine adjuvants -- especially those that may act on toll-like receptors to trigger the innate immunity system in the body.

FDA's Office of Vaccine Research & Review deputy director Florence Houn gave a presentation (of her personal views) on January 30 (see here). She noted concern that the agency does not fully understand the mechanism of action of adjuvants which enhance immune response. And she noted pointedly that the products will get used on broad populations.

The wide array of adjuvants under development for use in vaccines -- to improve the protective qualities of the products, to permit the use of lower doses of antigens, and to confer proprietary positions on the product sponsors -- represent a major step for the industry and a major risk for regulators. We have been saying that for over a year and a half (see here): adjuvants are a big opportunity, but they require a big decision from FDA.

As the new products with adjuvants approached the market, FDA tried to assuage concerns that there might be unusual regulatory burdens by saying that the current system for reviewing new products was adaptable to applications of products with adjuvants.

Now that the regulators face the prospect of having to make a decision on products that could go into wide use rapidly following commercial approval, the agency may be having second thoughts. Cervarix, after all, is headed into a big market, especially if GSK tries to compete strongly head up against Merck and Gardasil.

National Institute of Allergies and Infectious Diseases head Tony Fauci is generally an advocate for the new adjuvants. His institute has been aggressively funding work on adjuvants for the flu vaccines as well as other products. Even he, however, recognizes the pressure on FDA with the first approval of a product with an new adjuvant.

Fauci has said publicly that he understands why FDA would get cautious as the final decisions approach. He told an Institute of Medicine session on drug development at the end of 2007 that he recognized why FDA would want to examine these first applications carefully.

FDA's Houn spent a good part of her presentation pointing out that the agency is getting more interested in risk management programs for vaccines as well as drugs. She noted that the Acambis smallpox vaccine carries a full RiskMAP program--even though the product will be used primarily in the very controlled military patient population.

Reading further between the lines of Houn's speech, maybe risk management plans offer the way out for sponsors of the new adjuvant products.

Sponsors could relieve some of the pressure facing the agency by agreeing to programs to track the products broadly in the post-market arena. That is costly, but it may be one way to break what appears to be a developing log-jam over the new generation of vaccines.

This looks like a landmark decision for FDA, not an impasse. It will be interesting to see what GSK does to smooth the process.

Another Reason to Watch C-SPAN

"I don't recall"

If we had a nickel for every time one of us was on C-SPAN (as opposed to C-SPAN2, C-SPAN3, C-SPAN8 "The Ocho"), well, lets just say we'd have at least a nickel. RPM Report Editor-in-chief and occasional IN VIVO Blog-ger Cole Werble broke the ice for the rest of us on Tuesday, when he took part in an American Enterprise Institute briefing on vaccine development. Cole joined Paul A. Offit, M.D., from the Childrens’ Hospital of Philadelphia and University of Pennsylvania School of Medicine, to discuss vaccines and Offit's new book Vaccinated: One Man’s Quest to Defeat the World's Deadliest Diseases (HarperCollins, 2007).

Cole will have more on the discussion here later this week or early next. Meanwhile, you can access the webcast of the C-SPAN coverage here.

While You Weren't Working

For those of you in the US, we hope you had a relaxing three-day weekend. Here are a few items you may have missed while sparing a thought for the Noble and Holy Order of the Knights of Labor and/or enjoying a cocktail. Not everyone took the weekend off ...

• Merck & Co said on Sunday at the European Society of Cardiology congress in Vienna that Cordaptive, it's extended-release Niacin plus flushing inhibitor, was effective at lowering LDL cholesterol while raising HDL. Reuters has the full story.
• The Observer takes a look at investor unrest at GlaxoSmithKline, and in particular institutions attempts to get their points across to the company's as-yet unchosen new CEO, who will take the reigns when JP Garnier retires in May 2008. You might recall the Telegraph running something along these lines back in May (and our comments at the time on succession speculation). We'll have more to say on this later in the week.
• The Philadelphia Inquirer weighs in on the state of drug marketing, and finds that drug samples and TV ads help drive uptake of medicines.
• Eli Lilly's new schizophrenia drug may offer safety and efficacy improvements over existing antipsychotics, according to results of a 200-patient Phase II trial. From Nature, via the New York Times.
• Acambis has received FDA approval of its ACAM2000 smallpox vaccine